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A Level Business Sept-Feb OCR > Steeds > Flashcards

Steeds Flashcards

1
Q

Sectors of the economy

A

Primary
Secondary
Tertiary
Quaternary

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2
Q

Functions of a business

A 
Accounting and finance 
Operations management 
Marketing
HR management 
Customer service 
Sales and support services
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3
Q

Private/public sector and third sector organisations

A

Private sector- businesses owned by private individuals and companies, generally run “for profit”
Public sector- owned and run on behalf of the public, either run or funded by government. Not run “for profit”
Third sector organisations- value driven- not motivated by profit but a desire to achieve social goals (e.g. charities)

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4
Q

Unincorporated/Incorporated businesses

A

Unincorporated- owner is the business, unlimited liability, mostly sole traders
Incorporated- Owner isn’t the business, limited liability, most private limited companies

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5
Q

Unlimited/Limited liability

A

Unlimited- Owner(s) of a business are entirely responsible for its debts. Personal assets can be seized. Owner is the business
Limited- Can only lose what money you put into the business. Owner isn’t the business

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6
Q

Franchise definition

A
  • when you buy the rights to sell an established product
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7
Q

2 ad + 2 dis to franchiser

A 
Adv-
Firm may not have to spend large amounts of money in order to expand 
Applicants can be carefully selected 
Dis-
Element of risk 
Control issues
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8
Q

2 ad + 2 dis to franchisee

A 
Adv- 
Lower risk (proven business concept)
Support, advise and training 
Dis-
Franchise fees
Profit is shared 
Less control and independence
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9
Q

Cooperatives

A

A business run and owned by its members (employees and customers)
Profits shared between members rather than being distributed to shareholders

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10
Q

2 adv + 2 dis of cooperatives

A

Adv-
Legally straightforward to setup
Higher quality of service is likely to be provided
Dis-
Capital can be limited to what members contribute
Weak management- those selected may not have good business knowledge

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11
Q

2- adv + 2 dis of multinationals

A

Adv-
Job creation, significant training+ employment to work force
Adds to hosts countries GDP
Dis-
Domestic businesses may not be able to compete
Exploitation of employees/facilities

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12
Q

Determining size of business

A

Number of employees
Brand awareness
Number of factories, offices and shops

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13
Q

Factors affecting size of business

A

Market size
Nature of product (quality)
Legal structure

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14
Q

Reasons for growth

A

Entrepreneur wants greater challenge
Owners want higher return on investments
Growth into new markets can spread risk

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15
Q

Joint ventures (definition)

A

A commercial agreement between two or more participants who agree to cooperate and achieve a particular objective

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16
Q

Strategic Alliance (definition)

A

An agreement between two companies that undertake a mutually beneficial project while each retains independence

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17
Q

Operations management objectives

A

OM obj- Maximise the amount they produce

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18
Q

Mission statement

A

Overriding goal of the business’ reason for existence, provides a strategic perspective written for the stakeholders

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19
Q

Market orientated

A

Market oriented- prioritises identifying the needs and wants of consumers and creating products that satisfy them

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20
Q

Innovation adv

A
  • adds value to existing products

- increases efficiency

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21
Q

Types of production + definitions

A

Job- Products that are made for a specific need/requirement
Batch- A certain amount of the product is made and production has changed
Flow- Mass production of a product. Continuous movement of items through the production process
Cell- flow production line split into number of self-contained units. Each cell responsible for a significant part of the finished article

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22
Q

2 ad 2 dis of job

A 
Adv-
High quality products
Higher satisfaction for workers 
Dis- 
Product will take long time to make
Higher paid workers as they are higher skilled
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23
Q

2 ad 2 dis batch

A

Adv-
Cheaper labour than job
More efficient than job due to more automation used
Dis-
Downtime for machinery
Potentially demotivating for staff (boring)

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24
Q

2 ad + 2 dis of flow production

A

Advantages-
Cost per unit of production reduced through improved work and material flow
Capital intensive which means it can work constantly
Disadvantages-
Very long set up time and reliant on high-quality machinery
High set up costs

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25
Q

2 ad + 2 dis cell production

A

Advantages-
Improves communication, avoiding confusion/non-received messages
Greater worker motivation due to a variety of work
Disadvantages-
Workers can feel constantly pushed for more output with no rest
Recruitment and training of staff must support this approach

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26
Q

Factors that influence selecting the production method

A 
Nature of products
Cost of machinery/technology 
Workforce
Finance 
Customers 
Competition
Stakeholders/objectives 
Practicality of change 
Legal structure of business
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27
Q

Research and development

A

The process that enables the creation of new and improved products to meet the needs of customers

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28
Q

2 ad + 2 dis of r&d

A 
Advantages-
Improves the production process
Waste reduction
Disadvantages-
Cost of failure
Copying from other businesses 
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29
Q

Morphological studies

A

A method that generates ideas are cheaply and quickly- grid system with a range of alternatives to be considered.

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30
Q

Advantages of CPA

A

Reduces risk and cost of complex projects
Helps spot which activities have slack and could therefore transfer some resources
Provides managers with overview

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31
Q

Disadvantages of CPA

A

CPA based on assumptions and estimates
Doesn’t guarantee the success of a project
Resources may not be as flexible as management hope

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32
Q

Division of labour (Specialisation)

A

When people are allocated into specific tasks.

Intended to increase productivity

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33
Q

Advantages of division of labour

A

Leads to an increase in productivity

Output increases, average costs fall (EOS), profits increase

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34
Q

Disadvantages of division of labour

A

Can be boring and repetitive for worker- may leave/replaced by machinery
Lack of flexibility in workforce
May be higher training costs

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35
Q

Economies of scale

A

Unit costs fall as output rises

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36
Q

Diseconomies of scale

A

Unit costs rise as output rises

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37
Q

Productivity equation

A

productivity= output/input

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38
Q

Labour productivity

A

Concerned with the volume of output (units) or value (£) produced by each employee

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39
Q

Methods of increasing productivity

A 
Automation- quicker and consistent
Reduce labour- Reduces labour costs 
Training of staff
Monitoring
Improved organisation of production (layout)
40
Q

Benefits of increased productivity

A

Increases speed- decreases delivery time
Lowers average costs
Less staff further reduces costs

41
Q

Drawbacks of increased productivity

A

Job losses may lead to job insecurity meaning tasks are more difficult with discontent staff

42
Q

Capacity utilisation

A

A measure of the extent to which the productive capacity of a business is being used
Measure of productivity

43
Q

Capacity utilisation formula

A

Actual level of output/Maximum possible output x100

44
Q

Benefits of increasing capacity utilisation

A

Average costs fall which increases profit margins
Increased efficiency
Less wastage

45
Q

Disadvantages of capacity utilisation

A

Maintenance and breakdowns
Additional orders
Quality impact

46
Q

Stock control

A

Processes and controls used by a business to ensure that it has sufficient stock

47
Q

Types of stock

A

Raw materials
Work in progress
Finished products

48
Q

Labels on stock control graph

A 
Buffer stock
Minimum level 
Reorder level- will be higher the higher the demand
Maximum level 
Lead time
49
Q

Economic order quantity (EOQ)

A

Order quantity that minimises total inventory holding costs and ordering costs

50
Q

Benefits of holding stock

A

Meets demand
EOS
Buffer stock

51
Q

Costs of holding stock

A

Storage costs
Security costs
Insurance costs
Opportunity cost- business could spend costs of holding stock elsewhere

52
Q

Calculating the average stock levels

A

Maximum + minimum stock levels/2

53
Q

2 ad + 2 dis of joint ventures

A

Advantages-
Share costs
Can use each other’s expertise and resources
Disadvantages-
Conflict may occur
Clash of organisational structures (too many of one person e.g. HR departments)

54
Q

adv and dis of strategic alliances

A 
Advantages-
Sharing resources/expertise 
New market penetration 
Disadvantages-
Possibly no better off than if you ‘went alone’
legal disputes over who owns what
55
Q

Strategy (strategic objective)

A

Long term plan, based on the business vision

56
Q

Tactics (tactical objective)

A

Short term, responding to opportunities and threats

57
Q

Adding value

A

Difference between price of finished product and the cost of inputs

58
Q

How to add value

A

Build a brand
Excellent service
Product features/benefits
Reduce costs

59
Q

Benefits of adding value

A

Charging a higher price point
Creates a point of difference from competitors
Protection from competitors tasking idea and charging less for it

60
Q

Disadvantages of adding value

A

Not guaranteed that the cost will be recouped

Increase in price may reduce sales

61
Q

Aim

A

Long term goal

62
Q

Innovation

A

Practice of developing and introducing new products/services.
Taking an existing product and making it better

63
Q

Just in time production (JIT) (Kanban)

A

Management strategy that a company receives good as close as possible to when they are needed. Part of lean production

64
Q

Benefits of JIT

A

Low storage costs
Eliminates waste
Unit costs fall (insurance)

65
Q

Drawbacks of JIT

A

Complicated system
Expensive materials
Reliant on suppliers

66
Q

Last in first out (LIFO)

A

The most recently produced items are sold first.

67
Q

1st in 1st out (FIFO)

A

Assets purchased or products made first are sold first.

68
Q

Electronic point of sale (EPOS)

A

A combination of hardware and software designed to help you run businesses more effectively

69
Q

Supply factors

A

Labour costs
Land costs
Energy costs
Transport costs

70
Q

Demand factors

A

Customer convenience
Labour skills
Site suitability
Image

71
Q

Quality control

A

Process of inspecting products to ensure that they meet the required quality standards

72
Q

Advantages of quality control

A

Reduces wastage
Increased reputation
Reduces costs
EOS

73
Q

Disadvantages of quality control

A

Employees aren’t encouraged to take responsibility for the quality of their own work
Increased costs

74
Q

Logistics

A

Flow of things from origin to point of consumption

75
Q

Supply chain management

A

The interrogation of the buying of supplies, production, warehousing and transportation

76
Q

Reshoring

A

Transferring a business operation back to county where it was originally located

77
Q

Offshoring

A

Practice of basing a businesses operations overseas

78
Q

Outsourcing

A

Obtain goods/services by contract from an outside supplier

79
Q

Benefits of reshoring

A

Lowers costs
Lowers lead times
No impact of exchange rate
Lowers CSR implications

80
Q

Drawbacks of offshoring

A

Longer lead times
Increases management costs
Implications of CSR

81
Q

Kaizen production

A

An approach of constantly introducing small changes in a business to improve quality and efficiency

82
Q

Advantages of kaizen

A

Small changes require less capital investment

Encourages ownership of work, improves motivation

83
Q

Disadvantages of Kaizen

A

Employees may be reluctant to make suggestions

Employees may feel under pressure and stressed

84
Q

Ergonomics

A

Looks at relationship between employees and capital equipment being used so minimum time is spent on machines

85
Q

Advantages of ergonomics

A

Saves time
Employees may feel more motivated
Savings although aren’t significant it adds up over time

86
Q

Disadvantages of ergonomics

A

Employer has to pay the cost of ergonomic activity
Increases costs
Breakdowns leads to increased down time

87
Q

Subcontracting

A

Production of a particular part of a product is undertaken by another firm

88
Q

Importance of customer service

A

Adds value
Retains customers
Improves reputation

89
Q

Measuring customer service

A

Speed
Complaints
Customer loyalty

90
Q

Methods of improving customer service

A

Training
Roleplay
Benchmarking
Advice

91
Q

Decision making

A

Process of making choices by gathering information, involves an opportunity cost

92
Q

Corporate social responsibility (CSR)

A

About responsibility to all stakeholders

Most firms implement a code of practice/policy

93
Q

SWOT

A

Strengths
Weaknesses
Opportunities
Threats

94
Q

Internal audit

A

Business assesses its strengths and weaknesses in relation to competitors- done externally

95
Q

External audit

A

Looks at opportunities open to the business and the threats faced in internal environment

96
Q

Product orientated

A

Product orientated- prioritises making a product high quality

A Level Business Sept-Feb OCR (2 decks)

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